Jersey City, NJ · Member since 2017 · 124 posts · 13 votes
Hello Folks, i am working with a major bank and they have charged me $3024 in Loan Origination Charges for a 250K loan.
$1234 = Rate extension lock fee
$1357= Prepaids
$477 = Appraisals
$1095 = loan processing fee
They took $1792 from me in Dec 2017 for appraisals and initial fee and fooled me by giving 3.875 but in reality my rate turns out to be 4.25 and it will take me 7+ years to recover all this fee ($3024 + 1234 = around $4300). It is a standard 30yr FHA with 20% down.
What are my best options now? My closing is in 2 weeks.
These are not “loan origination” they are closing costs.
Are you paying for two appraisals?
I’m guessing you needed more time, hence the reason for the rate kick extension fee. Nothing else looks out order.
Appraisal is the only thing that they should be paying upfront, other than your earnest money deposit. Rates have increased a good deal since back in December.
Any reason you’re opting for an FHA loan even though you’re putting down 20%?
Sorry my bad it is not a FHA loan, it is a conventional 30 year fixed rate loan with 20% down
I did not lock rate for 7 months, for 6 I did but wasn’t told I will be charged twice for it.
I followed the fed hike news last dec 2017 and got pressurized into doing rate lock and I am ok paying the $2500 for rate lock - my issue is with the other 4500$ something fee being charged to me
So here’s my little maths :
1. Wells : down $1800 already
2. Any new lender will offer 4.5 and that’s a difference of $2160 in 5 years versus a 4.25 on 245k loan versus a difference of $3000 in 5 years at 3.875 (my current locked rate)
3. Any new lender will not waive appraisal fee ($500) and loan processing fee ($1100)
4. New loan in best case scenario at 4.25 will cost me 1600$ + my $1800 (lost with Wells) = 3400$ at 4.5 rate
Sticking with Wells right now means $7145 in fees and 3.875 rate but if I sell this place in 10 years or pay it off faster than these losses I am having now will change.
Wells already knows these numbers well and my situation so that’s why so far they have not budged a bit in terms of giving any credits
My lessons learnt is never ever to trust a lender when it comes to hidden costs & never ever in my life pay for a 6 month ahead of rate lock
Yeah I would never work with a lender for 6 months that’s just a good idea to get eaten alive with fees like this.
When possible I actually push hard for a faster closing, usually 30-40 days with a conventional lender. If they can’t get that done, then that’s probably not the lender for me.
Any big bank lender (Wells, BOA, Chase, etc) has high over head. The fact that they have branches and separate mortgage lending offices gives you idea of their rent. The best rates are companies that don't have many branches and basically do their business online web based. However, you will need high FICO above 740 and will not be hand held. You basically need to know the process.
The prepaids of $1357 are not fees, but paid in advance. The property taxes are prorated, and the interest is paid ahead to bring you to a first of month payment.
Your screwed on the rate extension as not sure why you locked in 6 months ahead of time and broke the time deadline.
The loan origination is a bit high. Perhaps you should have shopped around before you chose a lender. Online mortgage companies are the most competitive.
One bit of advice in future. All lenders say that they can beat their competitors. However, they neglect to mention in order to beat competitors prices, you must supply them with a truth in lending statement/estimate. In order to get this, you must submit a loan application. Double application the loan, and whoever gives you the best rate, go with them.
If I keep submitting loan apps, my credit score takes a bad hit & I have had bad experience in first home purchase when I went to these small independent online shops for mortgage - with fees and higher rates - they were just fooling me.
I did not break the 6 month lock with wells yet. Their loan origination fee and $1234 rate lock extension fee = a unknown surprise to me - other things are standard as you said.
So it’s $4300 ish that are extra and unpleasant.